Yes, tenants can refuse a rent increase, especially if it’s in the middle of a fixed-term contract.
But what happens next depends on how much a landlord wants to increase the rent by, the tenancy type and whether the tenant wants to stay in the property.
We get it, higher mortgage rates and rising costs mean landlords might need to review their rental income slightly more regularly than they used to.
But what if a tenant just refuses to pay more? Can they legally reject a rent increase?
The short answer: Yes, they can. Especially if the rent increase is being proposed in the middle of a fixed-term contract. However, there are some clear rules around how much the rent can be increased by, and how much a tenant can refuse.
As a landlord, it’s important to know these rules, especially if you want to put your rent up soon.
At J Property Management, we support landlords through every element of tenancy management, including handling rent reviews, Section 13 notices, and disputes.
Here’s what you need to know.
How Rent Increases Work in England
Most private tenancies in England that began after 15 January 1989 are either assured shorthold tenancies (ASTs) or assured tenancies.
These types of tenancies follow specific rules when it comes to rent increases.
Fixed-term tenancies (e.g. 6 or 12 months): Rent can only go up if the tenancy agreement includes a rent review clause, or if the tenant agrees.
Otherwise, rent has to stay the same until the fixed term ends.
Adding a rent review clause into the contract can help give you flexibility throughout.
Periodic (rolling) tenancies: If your tenants are on a rolling contract, then you can propose a rent increase once every 12 months using a Section 13 notice.
This is why having the right tenancy agreement in place is so important – the wrong one can prevent any increases at all, meaning your tenants have every right to refuse a higher rate of rent.
Not sure if your tenancy agreement allows for rent increases? J Property Management can review your tenancy documents and guide you, get in touch with the team today!
Can Tenants Refuse A Rent Increase?
Yes, they can, but what happens next depends on the situation:
If it’s during a fixed term
A tenant has the right to refuse the increase unless a rent review clause is in place. In that case, then you are allowed to suggest a rent increase, but only if it’s a fair increase.
If you issue a Section 13 notice
If the tenant is on a rolling contract and you issue a Section 13 notice, they can refuse to pay and take the matter to a First-tier Tribunal, which will decide if the increase is fair.
Until the tribunal decides, tenants only need to pay the old rent.
If you offer a new tenancy at a higher rent
If a fixed-term tenancy is over, then you are allowed to offer a new tenancy at the higher rent.
However, tenants don’t have to sign. If they don’t agree, the tenancy usually rolls into a periodic tenancy at the existing rent, unless you serve them with a Section 21 notice to leave.
How Do Section 13 Notices Work?
A Section 13 notice is the formal way to increase the rent in a periodic tenancy (also known as a rolling tenancy).
They can not be used within a fixed-term tenancy.
A Section 13 notice gives both the landlord and the tenant a fair and structured way to discuss rent increases without needing to draw up an entirely new tenancy agreement.
Here’s how it works for landlords:
- You can only use it once every 12 months.
- You can only use it for periodic, or rolling tenancies..
- You can’t issue it within the first year.
- You can’t issue it during a fixed-term tenancy unless the tenant agrees or the term has ended.
Here’s how you serve it:
You have to serve it using the official Form 4 (Notice of increase of rent under section 13 of the Housing Act 1988). If there are any errors on the document, it becomes invalid.
The increase must start on the first day of a rental period (e.g., if rent is due on the 1st of the month, the increase must also start on the 1st).
You must give at least one month’s notice if rent is paid weekly or monthly, or longer if rent is paid less frequently (e.g., quarterly or yearly).
If the tenant accepts, then the rent increase starts from the date on the notice.
If the tenant disagrees, they can apply to a First-tier Tribunal (Property Chamber) to decide whether the proposed increase is fair.
Until the tribunal makes a decision, the tenant only has to pay the original rent. If the tribunal rules that the rent increase isn’t fair, they have the power to reduce it or keep it the same.
At J Property Management, we help landlords prepare and serve Section 13 notices correctly, making sure they comply with the law and improve the chances of their increase being approved.
What Happens If A Tenant Refuses A Rent Increase?
If a tenant refuses to pay the increase and takes it to a tribunal, the tribunal will usually compare your rent with similar local properties.
They may approve your increase, lower it or leave the rent unchanged.
Unfortunately for landlords, their decision is binding.
Can You Evict A Tenant Who Refuses To Pay A Rent Increase?
If you’ve tried to negotiate an increase and the tenant refuses, as long as the fixed-term is over, you can serve a Section 21 notice to evict them.
However, Section 21 evictions will soon come to an end once the Renters’ Rights Bill comes into play. Under this, landlords will no longer be able to evict tenants without a valid reason like late payments or anti-social behaviour.
However for now, landlords are able to evict tenants once fixed term contracts come to an end.
How Landlords Can Set Themselves Up To Avoid Rent Increase Issues
Working with a professional property management company is always a good idea. Some of the main things we tell our clients are:
Check your tenancy agreement: Does it include a rent review clause? If not, make sure you have one in.
Give proper notice: Follow the Section 13 procedure carefully.
Do market research: Make sure your increase reflects local rent levels.
Negotiate first: Sometimes a small compromise avoids a long and expensive dispute.
Plan ahead: Factor rent reviews into your property management strategy.
At J Property Management, we manage these steps for landlords so you can protect your rental income without unnecessary stress.
So, Can Tenants Refuse A Rent Increase?
Yes, but that doesn’t mean you’re powerless as a landlord. Tenants can refuse an increase, but you can always issue a Section 13 notice or end the tenancy after the fixed term.
The key is to make sure your tenancy agreement is set up right from the start to avoid any issues down the line.
Want advice on handling a rent increase? Get in touch with J Property Management today. We’ll help you review your tenancy agreements, issue valid notices, and manage tenant negotiations for you.
